Econocom's CEO Jean-Louis Bouchard has said it was "a mistake" to let his son Robert take over the €2.8bn IT services company.
Addressing investors following the publication of its full-year 2018 results, Bouchard (pictured) said his son Robert hired people "lacking experience" into Econocom's management team who were "unable to make decisions".
Robert Bouchard took over the CEO post from his father in March 2018, but was quickly ousted six months later after Econocom posted a profit warning for the first six months of the year. Jean-Louis returned as CEO in October.
"I changed the management team and I made a mistake," he told investors, translated from the original French. "My mistake was [seeing] your own children as more beautiful than they are.
"[Robert] recruited applicants who were very able, capable people who were not experienced with Econocom and who didn't know the company. They came from public sector companies or from consulting, so they were lacking in experience.
"That lack of experience resulted in difficulties in decision making. And in business, if you don't make decisions well, business doesn't run well; cash doesn't improve that much and very quickly we were running the danger of having worse results than we expected and our cash wouldn't be as good as what we targeted. The combination of the two could create difficulties at the beginning of this year."
In an effort to steady the ship while Robert Bouchard was still installed at CEO, Jean-Louis Bouchard proposed bringing back Econocom veteran Jean-Phillipe Roesch, who left in 2017 after 25 years with the company.
According to Jean-Louis Bouchard, the move left Robert feeling as if he couldn't be trusted.
"Robert didn't accept that because he thought he was being placed under supervision," he said.
"So we came back in October and worked on doing mostly two things: we analysed what happened, and we changed the management team. There are 14 people and out of 14 there are 12 with a lot of experience. So we won't repeat last year's mistake or the year before.
"Relations with Robert have now stabilised, they've pacified so they're good. He was really brave to overcome that problem."
On returning as CEO, Bouchard said he has worked on encouraging Econocom's divisions to work together. Since October, Econocom's French business has been running an executive committee where directors meet face to face every two weeks.
"In the past it was the Wild West with silos, everybody developed their business on their own. We had a lot of fun together but we were not working together," he said.
Econocom to sell off two subsidiaries
The CEO also told investors that Econocom is looking to sell two of its subsidiaries: Aragon-eRH and SynerTrade.
Both companies are niche software vendors. Aragon-eRH develops HR software while SynerTrade sells e-Procurement solutions. Each company was acquired by Econocom subsidiary Digital Dimension in 2015.
"It is very simple. We've talked about three or four of our satellites that are not strategic for us. We don't make equipment, we don't develop software or publish software, and out of those satellites there are two - Aragon and SynerTrade - that publish software," he said.
"It's not really our core business, we don't know it and there's not much synergy there. We've decided to divest these businesses to maybe managers or other interested parties.
"We want the 11,000 people at Econocom to have an interesting and fascinating job from which they can earn a good living. If there are people better than us at some things, then we should let them do it."
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